Did you know that the estimated market size value of the supply chain is 15.85 billion?
Be it at the beginning or the end of the supply chain, businesses encounter logistics. The logistics industry encompasses the transportation and storage of merchandise.
Are you interested in having a successful global supply chain but have questions about the logistics process? If so, you might want to consider dispensing with some of the most common supply chain myths.
If you’ve never heard of supply chain management process myths, this article is for you. Read on to find out the truth.
It Is Linear
One of the most common supply chain myths today is that it is linear. This may have stemmed from the idea that in order to get something “normal”, you must follow a straight line of steps or processes, starting with the source, and leading to the customer.
In truth, supply chains are anything but linear. They often branch off into different paths, making the whole process more complex. Companies may be working with multiple suppliers, and each of those has its own specialized chains and processes.
Supply chains may even run backward at times to restock an item or pull out raw materials. In reality, supply chains are much more dynamic depending on the purpose of the chain. There is no single, ever-present straight line at the end.
It Costs Money
Another common myth surrounding supply chain management today is that it costs money. This could not be further from the truth. In fact, when you do supply chain management correctly, you can actually save money.
The supply chain can help to optimize inventory levels and avoid unnecessary costs. Failure to keep up with consumer demands can be costly.
Companies must assess the needs of their supply chain to ensure that their operations are cost-efficient. With the right strategies, you can debunk this myth and prove that supply chain management can help you save money.
It Is Too Complex
The idea that supply chain management is too complex is one of the biggest supply chain myths. With the advancement of technology, supply chain management has become much simpler.
Today, you can use advanced supply chain suite software to easily monitor and manage inventory. Using technology you can streamline important processes. This includes visualizing customer data, analyzing supply and demand trends, and more.
Additionally, with the help of artificial intelligence, the analysis of the supply chain has become more accurate, faster and cost-effective.
Therefore, the idea of supply chain management being overly complicated is nothing but a myth. Automated systems make it easy to connect with partners. It can also help identify and set goals, optimize resources, and make well-informed decisions.
You Can Outsource Supply Chain
While it’s true that you can outsource some of the elements of the supply chain, there are benefits and drawbacks associated with this approach. Outsourcing can provide a highly efficient and cost-effective way to manage the supply chain, yet it can also come with risks. If the chosen vendor fails to meet expectations, it can negatively impact the customer experience.
In addition, outsourcing can lead to a disconnect between the manufacturer and the customer. This will result in a lack of control over product quality and quantity. On the other hand, if you chose an experienced vendor with the right expertise, outsourcing can be beneficial due to a faster time-to-market and faster delivery time.
Ultimately, it comes down to the company’s individual needs and the risk profile of their business.
It Is All About Logistics
While there are many misconceptions, one of the most common myths is that “it’s all about logistics.” Logistics is, in fact, only one of many components of effective supply chain management.
The Shipping industry or logistics is about putting together a workflow to move raw materials, products, and services from one place to another. In moving the materials, products and services, you need the best shipping containers.
There are different types of shipping containers or cargo containers, so be sure to do your research if you want to be successful in the global supply chain or cargo transportation industry. You can find more info on cargo transportation online.
However, there is much more to supply chain management. This can include procurement, supplier management, inventory control, the accuracy of orders, manufacturing, customer service, and customer satisfaction are just a few of the many parts.
Logisticians have their part to play in many of these components. However, the entire supply chain should work together to meet customer demands.
You Can Manage It in Silos
It is untrue that you can manage the supply chain in silos. Instead, this myth emphasizes the risk and inefficiencies that result when the entire supply chain process is not considered holistically.
Silos lack the capacity to take into account the wider supply chain processes. Processes such as how raw materials are sourced and how production works. It also includes how products are delivered to customers, and how payments are managed.
This could lead to a fragmented supply chain that does not recognize risks of vulnerabilities within an organization. In order for organizations to stay agile and competitive, an integrated approach should be taken when managing the supply chain.
This approach will allow for transparency, collaboration and automation. This can lead to an efficient and cost-effective supply chain that can adapt to a quickly changing marketplace.
Know These Common Supply Chain Myths That Exist Today
On the whole, supply chain management is a complicated and ever-changing field of study. The supply chain is linear, costs money, complex, you can outsource, it’s all about logistics, and you can manage in silos are just some of the common supply chain myths that exist today.
Despite these myths, it is clear that they are often unwise and serve to only lead to confusing decisions made in an attempt to save time and money. Be sure to use the knowledge derived from this article. With the right idea, you can keep up with the latest trends and topics.
For more insights into how to take your supply chain management to new heights, check out our blog!